Trump's Economy Is So Volatile It Might Just Sink Him

Summary

Bulwark Takes: "Trump's Economy Is So Volatile It Might Just Sink Him"

Release Date: May 22, 2025

Hosts: Nicole Wallace, Tim Miller
Guests: Justin Wolfers (Professor of Economics and Public Policy, University of Michigan)

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Introduction

In this episode of Bulwark Takes, hosts Nicole Wallace and Tim Miller delve into the turbulent state of the U.S. economy under President Donald Trump's administration. The discussion centers around the proposed "big beautiful bill," its impact on financial markets, and the broader implications for the American populace and the MAGA coalition.

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The Debt Bomb and Market Reactions

Nicole Wallace opens the discussion by highlighting the precarious economic situation resulting from the Republican push to pass a substantial debt-increasing bill. She describes the bill as a "Frankenstein monster" that promises to exacerbate the national deficit, leading to investor unease and rising interest rates.

• Nicole Wallace [00:00]:
  "This Frankenstein monster of a bill is going to increase the deficit substantially and create a situation where America is like a lot of the holders of debt start to become uneasy about whether they're going to get paid back, which means interest rates start to go up, which is going to have a negative impact on everybody."

Tim Miller concurs, emphasizing the political maneuvering involved in pushing the bill through Congress without adequate deliberation.

• Tim Miller [01:13]:
  "Political pressure on the Republicans on the Hill to just do whatever Trump wants that they're just going to do it."

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Political Challenges in Passing the Bill

The hosts discuss the internal struggles within the Republican Party to finalize and pass the bill amidst increasing opposition and market instability. Nicole mentions a critical view from Thomas Me Massey, who derogatorily refers to the bill as the "Big Beautiful Turd," underscoring the chaotic nature of its formation.

• Nicole Wallace [01:15]:
  "How are you going to vote on something they're still writing that's going to massively revamp the economy in ways that are going to be pretty damaging for people who aren't at the very top of the income scale."

Tim Miller elaborates on Wall Street's negative reaction, noting a significant drop in the Dow by over 800 points due to fears surrounding the bill's implications.

• Tim Miller [02:57]:
  "Wall street investors are spooked by yet another of Donald Trump's economic pillars, the Dow, tumbling more than 800 points today over concerns about Trump's big beautiful bill."

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Impact on Regular Americans

Nicole Wallace shifts the focus to how the economic policies and rising interest rates directly affect everyday Americans. She explains that high interest rates are making housing unaffordable for many, whether they are young families buying their first home or retirees downsizing.

• Nicole Wallace [04:52]:
  "A lot of people are in a really tight squeeze when it comes to how much the interest rates are now as compared to how much they were five years ago, 10 years ago."

She emphasizes that the repercussions of increased debt and interest rates are no longer abstract economic concerns but tangible issues impacting individuals' daily lives.

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Trump's Stance on Debt

A pivotal moment in the episode features a clip of President Donald Trump discussing his approach to debt management. Trump proudly proclaims himself the "king of debt," suggesting a strategy of renegotiating unfavorable debt terms.

• Donald Trump [06:33]:
  "I call myself the king of debt. I'm the king of debt. I'm great with debt. Nobody knows debt better than me."

Nicole follows up with a question about his method of debt renegotiation.

• Nicole Wallace [06:44]:
  "How do you renegotiate the debt?"

Trump responds by humorously proposing to halve the debt amidst economic downturns.

• Donald Trump [06:46]:
  "Because you go back and you say, hey, guess what, the economy just crashed. I'm going to give you back half."

This exchange highlights the administration's cavalier attitude toward national debt and its potential consequences.

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Implications for the MAGA Coalition

Tim Miller probes the political fallout within the MAGA movement resulting from these economic policies. Nicole Wallace provides an in-depth analysis of the fractures forming within the coalition, driven by conflicting interests among its various factions.

• Nicole Wallace [07:00]:
  "You have your populist MAGA types that don't want these cuts to Medicaid and SNAP... You have the remaining Tea Party budget hawk types that are trying to find the cuts to pay for these tax cuts."

She explains that the resultant "Frankenstein monster" bill attempts to appease all factions superficially but inadvertently harms key segments of the middle and working class, thereby fracturing the coalition.

• Nicole Wallace [08:30]:
  "When you end up with spiking interest rates for middle class folks, when you end up with working class people losing their SNAP benefits in health care, there's going to be big parts of the MAGA coalition that are mad."

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Conclusion

The episode concludes with Tim Miller reflecting on the widespread economic pain being felt across the political spectrum. He underscores the unprecedented scale of suffering resulting from the administration's economic strategies, hinting at significant political repercussions for Trump.

• Tim Miller [08:30]:
  "What's amazing is what you're both describing is pain and suffering that will be indiscriminate at a partisan level... which hasn't really happened in the Trump story in such a mass scale."

The hosts affirm their commitment to keeping listeners informed amidst the evolving economic and political landscape.

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Key Takeaways:

• The proposed debt-increasing bill threatens to escalate the national deficit, causing investor unease and soaring interest rates.
• Internal conflicts within the Republican Party jeopardize the bill's passage, potentially weakening the MAGA coalition.
• Rising interest rates and economic instability are directly impacting regular Americans, making housing and other expenses more burdensome.
• President Trump's approach to debt management, characterized by renegotiation, may further undermine economic stability.
• The administration's economic policies risk alienating key voter demographics, leading to broader political consequences.

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For more insightful analyses and updates on the evolving economic situation, subscribe to Bulwark Takes and stay informed with unbiased, radical candor.

Transcript

[Nicole Wallace]

Hey y' all, I just finished doing Nicole Wallace with my friend Justin Wolfers who's been man awesome as an economic analyst about what is happening. I loved having him on the pod last week and we were talking about this negotiation on the Hill and really the fallout from the negotiation on the Hill in the markets. And we have seen this crash in the Dow today yet again and this really uneasy increase in the bond markets as a result of the Republicans being stubborn about jamming through this debt bomb, this Frankenstein monster of a bill that is going to increase the deficit substantially and create a situation where America is like a lot of the holders of debt start to become uneasy about whether they're going to get paid back, which means interest rates start to go up, which is going to have a negative impact on everybody. So me and Justin kind of talk about what the impact of this is going to be on regular people and why we're seeing another market drop today. I want to add to that that maybe it won't pass. I mean I keep saying it is going to because they just have a.

[Tim Miller]

Political.

[Nicole Wallace]

There'Ll be so much political pressure on the Republicans on the Hill to just do whatever Trump wants that they're just going to do it. But what you see today is that it's going to be a little harder than they thought. I mean they thought that they were going to be able to jam this thing through today and I mean they've barely made any progress and they're going to be into a situation where if they do jam it through, they're not even going to give the members time to read it. You had Thomas Me Massey tweeting about this earlier about how major provisions of the so called big beautiful bill, we're calling it the Big Beautiful Turd, how they're still being negotiated and written. How are you going to vote on something they're still writing that's going to massively revamp the economy in ways that are going to be pretty damaging for people who aren't at the very top of the income scale. It's quite the political pickle these guys are in. So we break it all down over on deadline White House. I'm sure I have more on this tomorrow with tomorrow's podcast guest. Once we kind of see how much of this they're able to get through tonight if, if they're able to. And we'll be monitoring for you as always. Make sure to subscribe right here to the feed. We are keeping you posted on everything that's going on out there. Not bullshitting you radical candor. So why not subscribe? If you haven't, tell your friends if you have, stick around for me. Nicole and Justin Wolfers. This will help to change the trajectory for the US Economy and send that message of stability to our allies and even our enemies around the world. America is back.

[Tim Miller]

Is it? What can safely be called some highly generous and only half heartedly delivered spin there from House Speaker Mike Johnson as he and Donald Trump desperately, desperately tried to shove Trump's big beautiful bill across the finish line. One group not buying it. Wall street investors are spooked by yet another of Donald Trump's economic pillars, the Dow, tumbling more than 800 points today over concerns about Trump's big beautiful bill. New York Times reporting this quote. For decades, budget hawks warned that America's debt load was unsustainable and that runaway spending financed with borrowed money was eventually going to scare investors away from lending to the U.S. those fears are now taking hold. Tax cuts pushed by the Trump administration are amplifying debt and deficit concerns among bond investors, a powerful group of market players who strongly influence how much it costs for the government to finance its budget. Those investors were already on edge over Trump's whipsawing tariff policy. Then this week's attempt to push through sweeping tax cuts without significantly slashing spending in what the president has called a big, beautiful bill set off a fresh bout of bond market turmoil. Joining our coverage, professor of economics and public policy at the University of Michigan, Justin Wolfers is back. Also joining us, MSNBC political analyst, host of the Bulwark podcast, Tim Miller is here. At a political level, even if you don't have a granular understanding of all of that, even if you don't understand it at all, people feel like crap about their personal economy. And all of the headlines are bad for Donald Trump, driving his approval ratings on the economy in general. But inflation, taxes, tariffs and costs to historic lows for Donald Trump.

[Nicole Wallace]

Here's the thing is, for those of us who have been deficit hawks, it might finally be our moment. And it's hard to get people to care about the deficit and the debt. Why? Right. Because it's hard for them to translate it into what's happening in their life lives. But right now, the interest rate issue is colliding with a lot of regular people in their lives, Republicans and Democrats. This is not a partisan issue. If you are about to retire and trying to downsize your home and you're looking at the interest rates on housing versus the interest rates you pay if you're young and you're trying to buy your first house. If you're starting a new family, you're trying to get a bigger house in the suburbs, no matter what. A lot of people are in a really tight squeeze when it comes to how much the interest rates are now as compared to how much they were five years ago, 10 years ago. And so if these guys on the Hill who claim to be fiscally responsible, who claim to be doge trying to cut the budget, if instead of doging the budget, they said they dump another $6 trillion in debt on top of it, it's not surprising that, like the interest rates are going to go up. This is what any deficit. There have been plenty of Republicans over the years that have warned this is going to happen. And the rubber is finally meeting the road. It's meeting the road with a president who, when he was in the private sector said he was the king of debt. And he was a king of debt in the first term. And it just didn't come back to bite him then. And it seems like this might be the moment that it comes back to bite him because it collides with some of the other stuff that Justin was talking about. And I do think it is going to have a real impact on people's lives. And you're going to start to see regular middle class folks who the debt hasn't been at the top of their issue, it's going to start to be if they feel stuck because the cost of everything becomes so high, because interest rates are so high.

[Donald Trump]

I call myself the king of debt. I'm the king of debt. I'm great with debt. Nobody knows debt better than me. I've made a fortune by using debt. And if things don't work out, I renegotiate the debt. I mean, that's a smart thing, not a stupid thing. And I made a few.

[Nicole Wallace]

How do you renegotiate the debt?

[Donald Trump]

Because you go back and you say, hey, guess what, the economy just crashed. I'm going to give you back half.

[Tim Miller]

Tim, where does this break the MAGA movement politically if it does?

[Nicole Wallace]

Yeah. Well, it would happen, I think six months to a year for ness is not short term because you're seeing the cracks in Congress right now and they're debating this. They can't get this thing through. It's the only thing that they're supposed to do all year. It's May 21st. They're supposed to vote on it tonight. We'll see. Maybe it'll happen in the middle of the night, but it breaks apart this MAGA movement because this kind of uneasy coalition between your Wall Street Journal, country club Republican crowd that wants the tax cuts, that wants the salt deduction, they want one element of this. You have your populist MAGA types that don't want these cuts to Medicaid and snap, at least in red states, you know, you have the remaining Tea Party budget hawk types that are trying to find the cuts to pay for these tax cuts, right? And so they're all infighting. And at the end of the day, to get it through, what they've come up with is this Frankenstein monster that jacks up the debt by 6 trillion, that still cuts money for SNAP and Medicaid and that gives the tax cuts to the wealthy and to like these upper middle class, you know, kind of country club Republican voters, particularly in big cities. And so they're doing that because they want to give a little bit to everybody. But when on the back end of that, when you end up with spiking interest rates for middle class folks, when you end up with working class people losing their SNAP benefits in health care, there's going to be big parts of the MAGA coalition that are mad. And I think that is where this is heading. Assuming they jam this thing through, it's going to take a little time for all that to filter through the economy.

[Tim Miller]

What's amazing is what you're both describing is pain and suffering that will be indiscriminate at a partisan level. You will hurt everybody for whom every purchase is something they have to think about. You will hurt everybody for whom any strain on their benefits or taking away from will be the difference between life and death potentially, which hasn't really happened in the Trump story in such a mass scale. Justin Wolvers and Tim Miller, thank you so much for making sense of it for me. It's great to see both of you. Another break for us. We'll be right back.